Project highlight: NEOM Green Hydrogen Complex

Saudi Arabia

ACWA Power, Air Products and NEOM are developing a green-hydrogen-based ammonia production plant at Oxagon, in Saudi Arabia’s region of NEOM, designed to run entirely on renewable energy.

The green-hydrogen-based facility will leverage NEOM’s solar and wind resources to power electrolysis processes that will convert water into carbon-free hydrogen. Output will be in the form of clean ammonia, which will be loaded from a dedicated berth onto tanker ships for distribution worldwide to power industrial applications, transportation and power generation.

KEY PLAYERS: The project is being executed through NEOM Green Hydrogen Company (NGHC), an equal-production joint venture between Air Products, ACWA Power and NEOM. Air Products acts as the project’s primary EPC contractor and systems integrator, as well as the exclusive offtaker of the project’s ammonia output under a 30-year agreement. The NEOM development is primarily funded by PIF, Saudi Arabia’s sovereign wealth fund, together with domestic and international investors.

MOTIVATION: Saudi Arabia aims to become the world’s top hydrogen exporter. In line with the Saudi Green Initiative, a national plan to scale climate actions and a central pillar of the Vision 2030 development programme, the NEOM venture is a first step towards creating a domestic industry that can produce green hydrogen in large quantities at competitive prices and capture the growing global demand for lower-carbon energy inputs.

SPECIFICATIONS: Located on the Oxagon floating industrial city housed within the planned city of NEOM being built in Saudi Arabia’s Tabuk Province on the northern coast of the Red Sea, the project calls for the construction of a production facility capable of turning out 600 tonnes per day of green hydrogen. It will include a 2-GW electrolyser powered by dedicated, on-site wind and solar facilities capable of generating up to 4 GW, and will house nitrogen production facilities and an ammonia synthesis plant. Upon operational launch in end-2026, the facility will produce up to 1.2 million tonnes per year (tpy) of ammonia for export.

INVESTMENT: The total investment value of the project is USD 8.4 billion. NGHC achieved financial close in May 2023 upon securing USD 6.1 billion in financing from 23 domestic and international banks and investment firms in one of the largest project financings put in place under a green loan framework.

BENEFITS: It is estimated that the output from the NEOM Green Hydrogen Complex can eliminate 5 million tpy of carbon dioxide emissions by replacing fossil fuels in transportation and industry. The project will create 2,000 direct jobs and mobilise thousands more by generating economic activity, serving as a catalyst for the emergence and expansion of adjacent industries and an important source of green hydrogen for domestic champions such as Saudi Aramco, SABIC and Ma’aden.

Image courtesy of NGHC

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